NEW YORK (CNN/Money) -
Former WorldCom Chief Financial Officer Scott Sullivan pleaded not guilty Wednesday to charges that he helped the bankrupt telecommunications company hide more than $5 billion in expenses.

A grand jury indicted Sullivan and Buford Yates, WorldCom's former director of general accounting, last week on seven counts of securities fraud, conspiracy to commit fraud, and filing false statements with the Securities and Exchange Commission.

Yates also pleaded not guilty to securities fraud charges at an arraignment Wednesday.

During the 10 a.m. ET hearing in federal district court before Judge Barbara S. Jones in downtown Manhattan, prosecutors said the WorldCom investigation is ongoing and that an additional indictment with criminal charges against Sullivan and Yates could be forthcoming along with additional defendants, a spokesman for the U.S. Attorney's office for the Southern District of New York said. The next hearing is scheduled for 2 p.m. ET on Dec. 9 before Judge Jones.

Sullivan had been in plea talks with prosecutors but balked at terms of a potential agreement because it included admitting to charges that carry a jail sentence that could exceed 10 years, the Wall Street Journal reported last week.

Sullivan may decide to take his chances with a jury because he has no criminal record, a wife with a serious illness, and a two-year-old child, according to previous press reports.

Each man faces a total of 25 years in prison and fines of $2.25 million if convicted of all counts.

The arraignment comes a day after federal prosecutors said they were trying to negotiate a plea agreement with WorldCom's former controller, David Myers, and said they obtained a 30-day delay in the time by which they could seek an indictment.

The government had until Tuesday to obtain the indictment or get a continuance in the case.

Investigators had also been talking to Yates in an effort to obtain more information about what other company officials knew about its accounting practices, the Journal report said.

According to the indictment, Sullivan, in an effort to help WorldCom's quarterly earnings meet Wall Street expectations, directed others, including Myers and Yates, to shift some lease payments from the income statement to the balance sheet in various ways, to keep quarterly expenses low enough to help WorldCom's earnings meet Wall Street expectations.

Meanwhile, a House subcommittee investigating WorldCom's collapse is questioning Citigroup about hundreds of thousands of shares in initial public offerings its brokerage unit, Salomon Smith Barney, gave to WorldCom executives, including former CEO Bernard Ebbers.